LAW00150: Analyzing Complex Contract Law Problems & Solutions

This assignment provides a comprehensive analysis of several business law problems related to contract law. It covers issues such as the intention to be legally bound in domestic agreements, the validity of consideration, part payment of debts, incorporation of terms in unsigned documents, and the validity of exclusion clauses. Cases like Balfour v Balfour and Stilk v Myrick are referenced to support the analysis. The assignment also discusses implied terms in contracts, referencing Section 19 of the Goods Act 1958. For each problem, the relevant legal issues are identified, applicable rules are stated, relevant cases are discussed, and a conclusion is reached with reasoning. This document is available on Desklib, a platform offering a range of study tools and resources for students.

Running Head: BUSINESS LAW
Business Law
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Author Note

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Problem 1
The relevant Issue identified
The issue that has been found in this case is that Charlie and Ali were not legally bound. Charlie
and Ali were not legally bound because it was identified that they both were brother and sister.
However, they both are domestically related to each other but it has also been identified that they
had a formal contractual agreement between them.
The relevant Rule applicable
In the formation of a contract, the essential element is the intention to be legal bound. The term
legally bound is important in a contract but if it is not found then it is a domestic agreement.
Domestic agreement means agreement between family members or friends. There are several
ways that court has found out to develop and identify the intention of legal bound.If there is a
written agreement then the intention to legal bound is present.
The identified cases
There are certain cases that is relevant to the above mentioned case. As per the first case named
Balfour v Balfour [1919] 2 KB 571, it has been said that Mr. Balfour was an engineer and he
lived with his wife in Ceylon. This couple came back to England in 1915 and there Mrs. Balfour
developed arthritis and it was advised by the doctor that she would be staying in England as this
disease might grow in Ceylon. Mr. Balfour had to return back to his work and he has orally
promised her that he would send 30 pounds every month to her. However, he refused to do so
and his wife sued him for not keeping up his promise. The judgment of the court held that no

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enforceable agreement was there as it was just an oral agreement or domestic agreement between
the husband and the wife.
In another case Todd v Nicol [1957] SASR 72, it was found out that the plaintiff (Todd) won this
case against the defendant (Nicole) as Nicole sent a letter to Todd to invite her to her place to
stay. It was clear that her intention was to make legal relation. However an argument was created
between them. After the argument Nicole did not want Todd to stay over there but she cannot tell
her to leave as a domestic contract was recognized as the legal presumption is challenged and it
will be administered by contract law.
Chances of winning
Yes, Ali will be winning this case as there was a written contract made between Ali and Charlie,
which Charlie had violated, and as they both were lawfully bound Charlie will have to have the
penalties for the violation of the contract under the Act. Although the agreement between Charlie
and Ali was domestic in nature the principles of the Todd v Nicol case will be applicable and the
presumption of no intention being present in a domestic agreement would be rebutted as they had
a written agreement between them which is an evidence that they wanted to get into a legal
relationship.
Problem 2
The relevant Issue identified
The issue that has been identified in this case is whether Nick is liable to pay to the police that is
based on the consideration’s principles of the services that has been given by the police.
The relevant Rule applicable

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One of the most important element of contract is consideration. The validity of the consideration
is through the rules that is given by common law. The first rule is that when a consideration is
made by a police officer to guard him is already a public duty and that consideration will not be
regarded as consideration. There are certain exceptions where the law provides duty has
exceeded then it would be regarded as a valid consideration.
The identified cases
According to the case Stilk v Myrick [1809] EWHC KB J58, it is explained that it is an English
Contract Law on the subject of consideration. There was a contract made between Stilk and
Myrick which stated that Stilk wants to work in a ship that was owned by Myrick with the
monthly salary of 5 pounds and he promises to work but not on emergencies. As the ship docked,
two men were deserted and as they could not find the replacement of the captain who promised
to pay those two men their wages. As these people arrived home they were refused to pay them
as they fulfilled their duty of the crewmen who were missing. The judgment was held that the
agreement is void of consideration. Another case was Ward v Byham [1956]. It was explained
that an unmarried couple got separated with a child. The husband had promised his wife to pay 1
pound per week only if the mother takes care of the child properly. Therefore, the judgment of
the court held that it is already the duty of the mother to take care of the child and this promise
was the public interest.
Chances of winning
No, Nick will not be winning this particular case which is in opposition to the police officer,
even where it is the duty of the police to safeguard him at that point of time. The principles of the
Stilk v Myrick case will ensure that the police officer is not bound to get the extra money,

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however if the principles of the Ward v Byham case is applied it can be stated that where the
police had provided extra effort by staying at night to guard Nick this would be an additional
effort and a valid contract will be established. Under the valid contract Nick is liable to pay the
police.
Problem 3
The relevant Issue identified
The issue that has been identified in this case study is that a part payment is the way to promise
to make a contract.
The relevant Rule applicable
As per the rule of part payment of debts, when a part of debt is paid as settlement then it is not a
consideration that is valid as law. However, if this payment of debt is complemented with any
other mode of payment that can be done before the due date is regarded as a valid consideration.
The identified cases
According to Pinnel’s case (1602) 77 ER 237 it has been noticed that a part payment has been
done. The judgment of the court held that it can only be considered as a valid consideration when
the part of debt has been paid and the rest can be paid by an additional fixture before the due
date. Another case named Foakes v Beer [1881–5] All ER Rep 106 has the same issue regarding
this above mentioned case.
Chances of winning

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No, Helen will not be able to win this case over Mike, as Mike had already cleared the partial
payment of the debt on time and also repaired the steering of Helen’s car which according to the
agreement made between them clears the debt and therefore, is a valid consideration.
Problem 4
The relevant Issue identified
The issue identified is whether there is any contract between the DVD store and Lizzie.
The relevant Rule applicable
Whether the terms of the unsigned documents are considered as the contractual terms or not and
it also depends on the reasonable notice in consideration with those terms has been given or not.
When the reasonable notice is given then those terms is given in the contract. Some elements
have been provided to check whether the notice is rational or not. These mentioned terms
comprises of the look of the document that helps it to be a contract and these terms are contained
in a document are unusual or whether any contradictory statement is made. In this same manner
the terms can be included through notice.
The identified cases
According to the case Interfoto Picture Library v Stiletto Visual Programmes ([1988] 1 All ER
348 there are terms that are being unusual. The court held the judgment that the terms of the
contractual document are not in relation to what it is in the present terms of a contract. Then
these terms must be taken into the notice of another party so that it gets included in the contract.
Chances of winning

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No, the DVD shop owner will not win this case over Lizzie. There was a sign that was seen by
Lizzie that contained many terms of contract. There was one term in the contract which stated
that Lizzie will be getting access to those DVD’s for 100$ for 3 months. She got into this
contract based on these terms. Due to her illness she could not return the DVD. When she
returned to the shop to give the DVD she was said that the terms that stated one DVD is kept for
more than one night then she has to pay a penalty of $20. However, the normal fine was $5. As
per the above mentioned case Interfoto Picture Library v Stiletto Visual Programmes case these
terms must be brought in the notice of Lizzie so that it can be included. Therefore, the term
cannot be incorporated.
Problem 5
The relevant Issue identified
The issue in this case is that whether the exclusion clause is valid or not between dry cleaners
and Tori.
The relevant Rule applicable
If one party is able to exclude or limit their liability in contract is known as an exclusion
contract. The inclusion and incorporation of the terms of contract is done when the exclusion
contract is valid or not. If the document has some misrepresentation and fraudulent terms then
also the terms are legally binding when the document is being signed.
The identified cases

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According to the case L'Estrange V Graucob [1934] 2 KB 394 it has been stated that the plaintiff
has signed a document that contains fine prints. There was an exclusion clause about the liability
of the seller.
According to another case of Curtis v Chemical Cleaning Co [1951] 1 KB 805, the plaintiff got
her wedding dress to get dry cleaned in a laundry whose owner was the defendant. A receipt was
signed by the plaintiff that included an exclusion clause. These clause had been misrepresented
as it was not binding. The agent of the laundry cleared that there was no special terms that was
present in the receipt. In the above mentioned case it had been stated by court that there was no
misrepresentation and fraud as the binding of contract.
Chances of winning
No, Tori will not be winning this case if any sort of claim is seen to be filed by her. As per the
case of L'Estrange V Graucob can be said that there was a contract between the dry cleaners and
Tori. It was been given that a document was signed by Tori which almost seemed to be like a
regular receipt and an agreement. Tori's dress was stained. There was a restriction the liability of
dry cleaners which the document has. As stated in the case there was no misrepresentation that
has been done by the dry cleaners. Thus where the contract was signed the terms are binding
even where she did not read them.
Problem 6
The relevant Issue identified

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As per the implied terms in a contract whether a successful claim can be made against a person
named Mr. Smith from Sanders.
The relevant Rule applicable
According to Section 19 of the goods Act 1958 there are some provisions which states that there
are no implied conditions which is related to the goods’ sale. There is an exception in the buying
of the goods buy a person expressly or implication which helps to signify the seller about these
goods must be bought for some specific work. The knowledge of the seller helps to buy those
goods that contains a condition that is implied in a contract which states that the goods must be
perfectly fine.
The identified cases
According to the case of David Jones v Willis (1934) 52 CLR 110 the knowledge of the seller
helps the buyer to buy those goods where the buyer signifies the seller that these goods are being
bought for a purpose. There is a breach of condition that is implied which states that the goods
were not fit for that particular purpose. The machine was also seen to be not working in the
desired way it was slow and the glass too was about to break.
Chances of winning
Yes, there is high chance that Sanders will be winning this case over Mr. Smith. There are
chances of Sandra to win this case against Mr. Smith. Santa is relied on the knowledge of Mr.
Smith to buy the goods and signifies Mr. Smith that she is buying those goods for the specific
work. It was said please ensure that the copier will not work slow as she was wanting for a fast
copier. The implied condition was breached because the copier was working slowly.

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References
Balfour v Balfour [1919] 2 KB 571
Curtis v Chemical Cleaning Co [1951] 1 KB 805
David Jones v Willis (1934) 52 CLR 110
Foakes v Beer [1881–5] All ER Rep 106
Interfoto Picture Library v Stiletto Visual Programmes ([1988] 1 All ER 348
L'Estrange V Graucob [1934] 2 KB 394
Pinnel’s case (1602) 77 ER 237
Stilk v Myrick [1809] EWHC KB J58
Todd v Nicol [1957] SASR 72
Ward v Byham [1956]